Just a couple of weeks ago, Ron Thomas asked, “What’s So Hard About Succession Planning?” Conceptually, succession planning looks pretty simple.
The plan should help you identify and develop people for important positions in your company forever. But that entails long-term thinking and disciplined execution and lots of hard work.
Alas, it seems to be human nature to pass on those things and substitute denial as a mental state and kicking the can down the road as a process. That can lead to some fascinating outcomes.
Succession at HP and Yahoo has been something of a soap opera in recent years. At Apple, succession planning was a closely held state secret. And then there’s Warner Brothers. The Los Angeles Times article headlined “Power Struggle at Warner Bros.” offers this summary.
“A three-way race for the top job at Warner Bros. was intended to inspire greatness in the candidates. Instead, it has led to distrust and disorder.”
You can read the gory details in the LA Times article. But consider how all this must look to Alan Mulally.
Since he was hired in 2006, Mulally has been creating a masterwork. He’s done all those business things, like selling off unprofitable operations, streamlining processes, and reducing costs. And he’s worked hard at culture change. Now Ford has announced that Mulally will retire in 2014.
This will not be easy. As Tom Walsh writes in the Detroit Free Press, “Ford’s succession challenge is keeping top execs happy.” That sounds scarily like Warner Brothers in the making.
For real culture change to happen, it has to reach all the way down to the base of the company. People who act on the values of the new culture need to be rewarded, praised, and promoted. Over time, the leadership ranks change to reflect the new culture.
That won’t happen in seven or eight years, especially at a place like Ford. That makes this succession critical. Get the right people in place and momentum builds. Otherwise the jungle of the old culture overgrows the shiny new one.
Mulally’s challenge is more than simply choosing a new CEO. It’s completing the masterwork of culture change, and succession planning is critical.
